Don’t Get Scammed: Phony Payday Collection Calls Are On The Rise

If you’ve ever dealt with debt collectors, it is a painful experience.  They are persistent and will try to reach you at all hours of the day and night.  Due to accelerating fraud being practiced worldwide, there are a growing number of fraudulent collectors preying on people who owe money on payday loans.  These perpetrators are even more aggressive than the already overzealous but genuine debt collectors, threatening everything from legal actions against you to having you arrested for non-payment.

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The Scam

But Credit.com reports that these particular callers are not really debt collectors at all. They’re extortionists and scammers, calling Americans from other countries as part of a long-running con to get money from consumers who, at some point in time, applied for online payday loans. One firm allegedly raked in $5 million before the FTC stepped in.

Credit.com also told the story of one such individual being harassed by these scammers. “I have been receiving calls from someone who is saying I owe money to a First American Cash Advance. Well, first of all, I can’t even get a payday loan — I am in the military. Besides that, they’ve been calling my work and it’s been difficult.”

The story continues with, “The number appears on my caller id as an out of area call (911). I’m not sure what that means. They say they work for the FBI and if I don’t pay I could go to prison. I never even received anything in the mail about this, as well as never having a payday loan, so I know it’s fake. I just want them to stop calling and harassing me. I can’t even understand them and they’re saying they will have me investigated.”

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What To Do

The Better Business Bureau recently reported that victims should not give in to harassing calls from fake debt collectors who try to pressure people into paying money that they don’t owe. Scammers are being more deceptive than ever, and this perennial scam is back in the news with a recent Federal Trade Commission settlement.

According to Usa.gov, if you receive these calls, you should not follow the caller’s instructions. Instead you should:

  • Notify your banking institutions.
  • Contact the three major credit bureaus and request an alert be put on your file.
  • Contact your local law enforcement agencies if you feel you are in immediate danger.
  • File a complaint at www.IC3.gov.

In addition, they also recommend taking certain steps to avoid becoming a victim of such a scam:

  • Never give your Social Security number—or personal information of any kind—over the telephone or online unless you initiate the contact.
  • Be suspicious of any e-mail with urgent requests for personal finance information. The e-mail may include upsetting or exciting but false statements to get you to react immediately.
  • Avoid filling out forms in e-mail messages that request personal information.
  • Ensure that your browser is up-to-date and security patches have been applied.
  • Check your bank, credit, and debit card statements regularly to make sure that there are no unauthorized transactions. If anything looks suspicious, contact your bank or card issuer immediately.
  • When you contact companies, use the telephone numbers provided on the back of your card or on your monthly statements.

When dealing with one of these harassing callers, Mark Fullbright, Senior Fraud Investigator with Identity Theft 911, advises people to “not get into a conversation with them in the first place. Hang up on them. They are effective because people want to converse about the debt and prove they do not owe a payday loan debt. There is nothing to prove to these scammers. Do not provide anything to them.”

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Have Your Suspicions

CNBC reported that scammers are very good at impersonation. When the phone rings and the person calling claims to be a debt collector, you need to be suspicious—even if they have a lot of personal information about you. It could be a con artist running the “phantom debt collector” scam.

In fact, thousands (yes thousands) of people have already complained to the Federal Trade Commission.  A look at the FTC website shows 6 press releases in just the first 9 months of 2014, which are directly related to fraudulent collection agencies. One recent release which was issued on September 17th reported that the FTC halted one false payday loan company that extorted tens of millions of dollars out of consumer’s bank accounts without their permission. Unfortunately, those numbers are quickly moving towards the billions.

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How Are They Doing This?

It is important to recognize the larger picture with regard to the increase of such activity: globalization. For instance, if you are old enough, you may recall how expensive it was not so long ago to communicate with people internationally.  Or perhaps when a rotary landline bill was a large part of a monthly household budget?  Yet with the globalization of our communities, particularly through electronic technology and communication, one can now play a game of chess with someone on the other side of the world at very little cost.

Before globalization, it was unheard of to get a call from someone in India, Nigeria, or any other international location.  Because of globalization, we are more prone to accept a phone call from someone named “Robert Jackson” having a heavy Indian accent, than it used to be in days not so long ago. If you get one of those calls, it is important to remember that you need to immediately hang up the phone and report it to the Federal Trade Commission.

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A Congressional Research Report was written by Kristen Finklea in January of this year for the Members and Committees of Congress. In this report, Finklea states, “Increasing globalization and the expansion of advanced technology have provided a challenging environment for law enforcement to both identify and apprehend identity thieves targeting persons residing in the United States.  For one, these criminals may be operating within the U.S. Borders as well as from beyond. There is no publicly available information, however, delineating the proportion of identity theft (or other crimes known to be identity theft-related) committed by domestic and international criminals.”

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Be Smart

Ultimately, we all need to be more aware of where our personal information can be found in cyberspace and limit any conveyance of our personal information electronically.  In this global era, we now have to expect that there are more fraudulent online businesses, than there are legitimate.  Always research an online business before conducting transactions with them.